Automakers cut BS-IV vehicle production to prepare for BS-VI transition

Mumbai: Honda Cars India, Toyota Kirloskar and Renault India will cease production of Bharat Stage-IV vehicles on January 31, two months ahead of the country’s transition to the cleaner BS-VI emission standards. Other automakers such as Mahindra & Mahindra and Tata Motors too have aggressively started correcting BS-IV production and inventory, while Maruti Suzuki and Hyundai Motor India have already started selling several petrol-run models that meet the upcoming emission rules.

The companies are trying to ensure that there is no fire sale, as seen during the transition from BS-III to BS-IV transition for two-wheelers and commercial vehicles.

While they scale up production of BS-VI vehicles, even as oil marketing companies make fuel compliant with the new regulations available pan India, they will seek to clear the stock of BS-IV units that cannot be sold or registered from April 1. BS-VI fuels aren’t currently available in most parts of the country.

According to multiple vendors, the planned output for December and January is down 30-40% at Toyota, 30-50% at Honda, about 30% at Mahindra and 20% at the passenger vehicle division of Tata Motors.

Toyota said the company was doing a pipeline correction to liquidate stocks by December and work towards a smooth transition to BS-VI.

A spokesperson said it had “consciously” lowered the volume of vehicles sold to dealers to ensure lean inventory and no excess burden before the shift to the new standards.

“Customers are also aware of the model year price rise in January and the significant price hike of diesel vehicles by 15-20% post BS-VI,” said the Toyota Kirloskar spokesperson. He said this had led to increased demand for BS-IV vehicles, helping it “in pushing retail sales and enabling successful runout of products before the shift to BS-VI”.

Honda Cars said it took a call to cut fiscal fourth-quarter volumes to ensure no accumulation of leftover stock of BS-IV vehicles. It is likely to produce 30-50% fewer vehicles in the quarter than the average of the first three quarters of the financial year.

Rajesh Goel, senior VP & director, marketing & sales at Honda Cars India, said: “We should be producing our last BS-IV model by January-end. We need to keep some gap to ensure that there is enough stock at the dealership once the BS-VI emission norms kick in.”

Market leader Maruti Suzuki has already transitioned eight of its 15 models to BS-VI standards. These models account for as much as 70% of the company’s volumes. Its closest rival, Hyundai Motor India, has three models running on BS-VI engines.

Honda’s Goel said a majority of its existing line up would continue in BS-VI era. He did not say which models would be discontinued.

Toyota said it would soon start rolling out BS-VI compliant Innova and Fortuner — the Glanza, Yaris and Camry are already available in petrol BS-VI. In diesel vehicles, the company is ready with products and is waiting for BS-VI fuel to be made available in the market, it said.